India’s central textile industry continued to expand in 2013 but struggled with rapidly rising costs.
India’s apparel exports in 2013 were greater than its non-apparel exports and is expected to rack up 15 percent growth over the previous year before the end of 2013. By contrast last year saw a 5 percent decline in growth.
Several factors account for India’s newly booming textile sector. For the first time in recent years, Indian textile exports were able to compete with Chinese and Bangladeshi exports.
An 11 percent depreciation of India’s currency, the rupee, since January, 2013, gave the country a competitive boost as China contended with rising labor costs and an upturn in their currency, the yuan. In Bangladesh, textile workers staged frequent protests demanding an increase in wages, prompting some retailers to look for politically stable alternatives, like India.
Adding fuel to the growth of India’s textile exports are the economic recoveries in both the U.S. and E.U. — markets which absorb more than 80 percent of the country’s textile exports.
The bad news, which reined in sector profitability to some degree, were higher finance costs and an increase in the costs of some key raw manufacturing materials, including cotton and yarn.
The cost increases eroded margins generally, although India’s Trident Ltd., a top home textiles exporter, posted a staggering net profit growth of more than 50 times last year’s performance. Trident plans to increase the number of its looms for both towel and sheeting production.
Also posting significant export growth were Alok Industries, Arvind, Gokaldas Exports and Vardhman Textiles.